Targa Resources to acquire Targa Resources Partners

Targa Resources Corp. (NYSE: TRGP) (TRC) will acquire all of the outstanding common units of Targa Resources Partners LP (NYSE: NGLS) (TRP) not already owned by TRC in an all stock-for-unit transaction at a ratio of 0.62 TRC common shares per common unit of Targa Resources Partners. The implied TRP unit price represents an 18% premium to its volume-weighted average price during the 10 trading days ending Nov. 2.

Following this transaction, TRC expects dividend growth of 15% for 2016 and greater than 10% compound annual dividend growth through 2018, assuming consensus analyst commodity prices and related capex and other assumptions.

Once the transaction is completed, all of the outstanding common units of TRP will be owned by TRC and will no longer be publicly traded. The incentive distribution rights of TRP will be eliminated. All of TRP’s outstanding debt and Series A preferred units will remain outstanding. No additional financing is required for the transaction.

The transaction is expected to close in the first quarter of 2016, and is subject to the approval of the common unitholders of TRP and shareholders of TRC.

Evercore Partners acted as advisor to the TRC board and Barclays acted as financing advisor to the TRC board. Citigroup acted as financial advisor to the Conflicts Committee of TRP. Richards, Layton & Finger served as legal counsel to the Conflicts Committee of TRP, and Vinson & Elkins LLP served as legal counsel to TRC.


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